Customer-Driven Misconduct: How Competition Corrupts Business Practices

• 成果类型: Article
• 署名作者: Bennett, Victor Manuel; Pierce, Lamar; Snyder, Jason A.; Toffel, Michael W.
• 署名单位: University of Southern California; Washington University (WUSTL); University of California System; University of California Los Angeles; Harvard University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.1120.1680
• 发表日期: 2013
• 页码: 1725-1742
• 关键词: environment; pollution; GOVERNMENT; regulations; judicial; LEGAL; Crime prevention; organizational studies; strategy; MICROECONOMICS; market structure and pricing

摘要

Competition among firms yields many benefits but can also encourage firms to engage in corrupt or unethical activities. We argue that competition can lead organizations to provide services that customers demand but that violate government regulations, especially when price competition is restricted. Using 28 million vehicle emissions tests from more than 11,000 facilities, we show that increased competition is associated with greater inspection leniency, a service quality attribute that customers value but is illegal and socially costly. Firms with more competitors pass customer vehicles at higher rates and are more likely to lose customers whom they fail, suggesting that competition intensifies pressure on facilities to provide illegal leniency. We also show that, at least in markets in which pricing is restricted, firms use corrupt and unethical practices as an entry strategy.